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G.R. No.

144672

July 10, 2003

SAN MIGUEL CORPORATION, petitioner,


vs.
MAERC INTEGRATED SERVICES, INC.; and EMERBERTO ORQUE, ROGELIO
PRADO, JR., EDDIE SELLE, ALEJANDRO ANNABIEZA, ANNIAS JUAMO-AS,
CONSORCIO MANLOLOYO, ANANIAS ALCONTIN, REY GESTOPA, EDGARDO
NUEZ, JUNEL CABATINGAN, PAUL DUMAQUETA, FELIMON ECHAVEZ, VITO
SEALANA, DENECIA PALAO, ROBERTO LAPIZ, BALTAZAR LABIO, LEONARDO
BONGO, EL CID ICALINA, JOSE DIOCAMPO, ADELO CANTILLAS, ISAIAS
BRANZUELA, RAMON ROSALES, GAUDENCIO PESON, HECTOR CABAOG,
EDGARDO DAGMAYAN, ROGELIO CRUZ, ROLANDO ESPINA, BERNARDINO
REGIDOR, ARNELIO SUMALINOG, GUMERSINDO ALCONTIN, LORETO NUEZ,
JOEBE BOY DAYON, CONRADO MESANQUE, MARCELO PESCADOR,
MARCELINO JABAGAT, VICENTE DEVILLERES, VICENTE ALIN, RODOLFO
PAHUGOT, RUEL NAVARES, DANILO ANABIEZA, ALEX JUEN, JUANITO GARCES,
SILVINO LIMBAGA, AURELIO JURPACIO, JOVITO LOON, VICTOR TENEDERO,
SASING MORENO, WILFREDO HORTEZUELA, JOSELITO MELENDEZ, ALFREDO
GESTOPA, REGINO GABUYA, JORGE GAMUZARNO, LOLITO COCIDO, EFRAIM
YUBAL, VENERANDO ROAMAR, GERARDO BUTALID, HIPOLITO VIDAS,
VENGELITO FRIAS, VICENTE CELACIO, CORLITO PESTAAS, ERVIN HYROSA,
ROMMEL GUERERO, RODRIGO ENERLAS, FRANCISCO CARBONILLA, NICANOR
CUIZON, PEDRO BRIONES, RODOLFO CABALHUG, TEOFILO RICARDO, DANILO
R. DIZON, ALBERTO EMBONG, ALFONSO ECHAVEZ, GONZALO RORACEA,
MARCELO CARACINA, RAUL BORRES, LINO TONGALAMOS, ARTEMIO BONGO,
JR., ROY AVILA, MELCHOR FREGLO, RAUL CABILLADA, EDDIE CATAB,
MELENCIO DURANO, ALLAN RAGO, DOMINADOR CAPARIDA, JOVITO CATAB,
ALBERT LASPIAS, ALEX ANABIEZA, NESTOR REYNANTE, EULOGIO GESTOPA,
MARIO BOLO, EDERLITO A. BALOCANO, JOEL PEPITO, REYNALDO LUDIA,
MANUEL CINCO, ALLAN AGUSTIN, PABLITO POLEGRATES, CLYDE PRADO,
DINDO MISA, ROGER SASING, RAMON ARCALLANA, GABRIEL SALAS, EDWIN
SASAN, DIOSDADO BARRIGA, MOISES SASAN, SINFORIANO CANTAGO,
LEONARDO MARTURILLAS, MARIO RANIS, ALEXANDRO RANIDO, JEROME
PRADO, RAUL OYAO, VICTOR CELACIO, GERALDO ROQUE, ZOSIMO
CARARATON, VIRGILIO ZANORIA, JOSE ZANORIA, ALLAN ZANORIA,
VICTORINO SENO, TEODULO JUMAO-AS, ALEXANDER HERA, ANTHONY
ARANETA, ALDRIN SUSON, VICTOR VERANO, RUEL SUFRERENCIA, ALFRED
NAPARATE, WENCESLAO BACLOHON, EDUARDO LANGITA, FELIX ORDENEZA,
ARSENIO LOGARTA, EDUARDO DELA VEGA, JOVENTINO CANOOG, ROGELIO
ABAPO, RICARDO RAMAS, JOSE BANDIALAN, ANTONIO BASALAN, LYNDON
BASALAN, WILFREDO ALIVIANO, BIENVENIDO ROSARIO, JESUS
CAPANGPANGAN, RENATO MENDOZA, ALEJANDRO CATANDEJAN, RUBEN
TALABA, FILEMON ECHAVEZ, MARCELINO CARACENA, IGNACIO MISA,
FELICIANO AGBAY, VICTOR MAGLASANG, ARTURO HEYROSA, ALIPIO TIROL,
ROSENDO MONDARES, ANICETO LUDIA, REYNALDO LAVANDERO, REUYAN

HERCULANO, TEODULO NIQUE, EMERBERTO ORQUE, ZOSIMO BAOBAO,


MEDARDO SINGSON, ANTONIO PATALINGHUG, ERNESTO SINGSON, ROBERTO
TORRES, CESAR ESCARIO, LEODEGARIO DOLLECIN, ALBERTO ANOBA,
RODRIGO BISNAR, ZOSIMO BINGAS, ROSALIO DURAN, SR., ROSALIO DURAN,
JR., ROMEO DURAN, ANTONIO ABELLA, MARIANO REPOLLO, POLEGARPO
DEGAMO, MARIO CEREZA, ANTONIO LAOROMILLA, PROCTUSO MAGALLANES,
ELADIO TORRES, WARLITO DEMANA, HENRY GEDARO, DOISEDERIO
GEMPERAO, ANICETO GEMPERAO, JERRY CAPAROSO, SERLITO NOYNAY,
LUCIANO RECOPELACION, JUANITO GARCES, FELICIANO TORRES, RANILO
VILLAREAL, FERMIN ALIVIANO, JUNJIE LAVISTE, TOMACITO DE CASTRO,
JOSELITO CAPILINA, SAMUEL CASQUEJO, LEONARDO NATAD, BENJAMIN
SAYSON, PEDRO INOC, EDWARD FLORES, EDWIN SASAN, JOSE REY INOT,
EDGAR CORTES, ROMEO LOMBOG, NICOLAS RIBO, JAIME RUBIN, ORLANDO
REGIS, RICKY ALCONZA, RUDY TAGALOG, VICTORINO TAGALOG, EDWARD
COLINA, RONIE GONZAGA, PAUL CABILLADA, WILFREDO MAGALONA, JOEL
PEPITO, PROSPERO MAGLASANG, ALLAN AGUSTIN, FAUSTO BARGAYO,
NOMER SANCHEZ, JOLITO ALIN, BIRNING REGIDOR, GARRY DIGNOS, EDWIN
DIGNOS, DARIO DIGNOS, ROGELIO DIGNOS, JIMMY CABIGAS, FERNANDO
ANAJAO, ALEX FLORES, FERNANDO REMEDIO, TOTO MOSQUIDA, ALBERTO
YAGONIA, VICTOR BARIQUIT, IGNACIO MISA, ELISEO VILLARENO, MANUEL
LAVANDERO, VIRCEDE, MARIO RANIS, JAIME RESPONSO, MARIANITO
AGUIRRE, MARCIAL HERUELA, GODOFREDO TUACAO, PERFECTO REGIS,
ROEL DEMANA, ELMER CASTILLO, WINEFREDO CALAMOHOY, RUDY
LUCERNAS, ANTONIO CAETE, EFRAIM YUBAL, JESUS CAPANGPANGAN,
DAMIAN CAPANGPANGAN, TEOFILO CAPANGPANGAN, NILO CAPANGPANGAN,
CORORENO CAPANGPANGAN, EMILIO MONDARES, PONCIANO AGANA,
VICENTE DEVILLERES, MARIO ALIPAN, ROMANITO ALIPAN, ALDEON
ROBINSON, FORTUNATO SOCO, CELSO COMPUESTO, WILLIAM ITORALDE,
ANTONIO PESCADOR, JEREMIAS RONDERO, ESTROPIO PUNAY, LEOVIJILDO
PUNAY, ROMEO QUILONGQUILONG, WILFREDO GESTOPA, ELISEO SANTOS,
HENRY ORIO, JOSE YAP, NICANOR MANAYAGA, TEODORO SALINAS, ANICETO
MONTERO, RAFAELITO VERZOSA, ALEJANDRO RANIDO, HENRY TALABA,
ROMULO TALABA, DIOSDADO BESABELA, SYLVESTRE TORING, EDILBERTO
PADILLA, ALLAN HEROSA, ERNESTO SUMALINOG, ARISTON VELASCO, JR.,
FERNANDO LOPEZ, ALFONSO ECHAVEZ, NICANOR CUIZON, DOMINADOR
CAPARIDA, ZOSIMO CORORATION, ARTEMIO LOVERANES, DIONISIO YAGONIA,
VICTOR CELOCIA, HIPOLITO VIDAS, TEODORO ARCILLAS, MARCELINO
HABAGAT, GAUDIOSO LABASAN, LEOPOLDO REGIS, AQUILLO DAMOLE, WILLY
ROBLE and NIEL ZANORIA, respondents.
BELLOSILLO, J.:
TWO HUNDRED NINETY-ONE (291) workers filed their complaints (nine [9] complaints
in all) against San Miguel Corporation (petitioner herein) and Maerc Integrated Services,
Inc. (respondent herein), for illegal dismissal, underpayment of wages, non-payment of
service incentive leave pays and other labor standards benefits, and for separation pays

from 25 June to 24 October 1991. The complainants alleged that they were hired by
San Miguel Corporation (SMC) through its agent or intermediary Maerc Integrated
Services, Inc. (MAERC) to work in two (2) designated workplaces in Mandaue City: one,
inside the SMC premises at the Mandaue Container Services, and another, in the
Philphos Warehouse owned by MAERC. They washed and segregated various kinds of
empty bottles used by SMC to sell and distribute its beer beverages to the consuming
public. They were paid on a per piece or pakiao basis except for a few who worked as
checkers and were paid on daily wage basis.
Complainants alleged that long before SMC contracted the services of MAERC a
majority of them had already been working for SMC under the guise of being employees
of another contractor, Jopard Services, until the services of the latter were terminated
on 31 January 1988.
SMC denied liability for the claims and averred that the complainants were not its
employees but of MAERC, an independent contractor whose primary corporate purpose
was to engage in the business of cleaning, receiving, sorting, classifying, etc., glass and
metal containers.
It appears that SMC entered into a Contract of Services with MAERC engaging its
services on a non-exclusive basis for one (1) year beginning 1 February 1988. The
contract was renewed for two (2) more years in March 1989. It also provided for its
automatic renewal on a month-to-month basis after the two (2)-year period and required
that a written notice to the other party be given thirty (30) days prior to the intended date
of termination, should a party decide to discontinue with the contract.
In a letter dated 15 May 1991, SMC informed MAERC of the termination of their service
contract by the end of June 1991. SMC cited its plans to phase out its segregation
activities starting 1 June 1991 due to the installation of labor and cost-saving devices.
When the service contract was terminated, complainants claimed that SMC stopped
them from performing their jobs; that this was tantamount to their being illegally
dismissed by SMC who was their real employer as their activities were directly related,
necessary and desirable to the main business of SMC; and, that MAERC was merely
made a tool or a shield by SMC to avoid its liability under the Labor Code.
MAERC for its part admitted that it recruited the complainants and placed them in the
bottle segregation project of SMC but maintained that it was only conveniently used by
SMC as an intermediary in operating the project or work directly related to the primary
business concern of the latter with the end in view of avoiding its obligations and
responsibilities towards the complaining workers.
The nine (9) cases1 were consolidated. On 31 January 1995 the Labor Arbiter rendered
a decision holding that MAERC was an independent contractor.2 He dismissed the
complaints for illegal dismissal but ordered MAERC to pay complainants' separation
benefits in the total amount of P2,334,150.00. MAERC and SMC were also ordered to

jointly and severally pay complainants their wage differentials in the amount of
P845,117.00 and to pay attorney's fees in the amount of P317,926.70.
The complainants appealed the Labor Arbiter's finding that MAERC was an independent
contractor and solely liable to pay the amount representing the separation benefits to
the exclusion of SMC, as well as the Labor Arbiter's failure to grant the Temporary Living
Allowance of the complainants. SMC appealed the award of attorney's fees.
The National Labor Relations Commission (NLRC) ruled in its 7 January 1997 decision
that MAERC was a labor-only contractor and that complainants were employees of
SMC.3 The NLRC also held that whether MAERC was a job contractor or a labor-only
contractor, SMC was still solidarily liable with MAERC for the latter's unpaid obligations,
citing Art. 1094 of the Labor Code. Thus, the NLRC modified the judgment of the Labor
Arbiter and held SMC jointly and severally liable with MAERC for complainants'
separation benefits. In addition, both respondents were ordered to pay jointly and
severally an indemnity fee of P2,000.00 to each complainant.
SMC moved for a reconsideration which resulted in the reduction of the award of
attorney's fees from P317,926.70 to P84,511.70. The rest of the assailed decision was
unchanged.5
On 12 March 1998, SMC filed a petition for certiorari with prayer for the issuance of a
temporary restraining order and/or injunction with this Court which then referred the
petition to the Court of Appeals.
On 28 April 2000 the Court of Appeals denied the petition and affirmed the decision of
the NLRC.6 The appellate court also denied SMC's motion for reconsideration in a
resolution7 dated 26 July 2000. Hence, petitioner seeks a review of the Court of
Appeals' judgment before this Court.
Petitioner poses the same issues brought up in the appeals court and the pivotal
question is whether the complainants are employees of petitioner SMC or of respondent
MAERC.
Relying heavily on the factual findings of the Labor Arbiter, petitioner maintained that
MAERC was a legitimate job contractor. It directed this Court's attention to the
undisputed evidence it claimed to establish this assertion: MAERC is a duly organized
stock corporation whose primary purpose is to engage in the business of cleaning,
receiving, sorting, classifying, grouping, sanitizing, packing, delivering, warehousing,
trucking and shipping any glass and/or metal containers and that it had listed in its
general information sheet two hundred seventy-eight (278) workers, twenty-two (22)
supervisors, seven (7) managers/officers and a board of directors; it also voluntarily
entered into a service contract on a non-exclusive basis with petitioner from which it
earned a gross income of P42,110,568.24 from 17 October 1988 to 27 November 1991;
the service contract specified that MAERC had the selection, engagement and
discharge of its personnel, employees or agents or otherwise in the direction and control

thereof; MAERC admitted that it had machinery, equipment and fixed assets used in its
business valued at P4,608,080.00; and, it failed to appeal the Labor Arbiter's decision
which declared it to be an independent contractor and ordered it to solely pay the
separation benefits of the complaining workers.
We find no basis to overturn the Court of Appeals and the NLRC. Well-established is the
principle that findings of fact of quasi-judicial bodies, like the NLRC, are accorded with
respect, even finality, if supported by substantial evidence. 8 Particularly when passed
upon and upheld by the Court of Appeals, they are binding and conclusive upon the
Supreme Court and will not normally be disturbed. 9
This Court has invariably held that in ascertaining an employer-employee relationship,
the following factors are considered: (a) the selection and engagement of employee; (b)
the payment of wages; (c) the power of dismissal; and, (d) the power to control an
employee's conduct, the last being the most important. 10 Application of the aforesaid
criteria clearly indicates an employer-employee relationship between petitioner and the
complainants.
Evidence discloses that petitioner played a large and indispensable part in the hiring of
MAERC's workers. It also appears that majority of the complainants had already been
working for SMC long before the signing of the service contract between SMC and
MAERC in 1988.
The incorporators of MAERC admitted having supplied and recruited workers for SMC
even before MAERC was created.11 The NLRC also found that when MAERC was
organized into a corporation in February 1988, the complainants who were then already
working for SMC were made to go through the motion of applying for work with Ms.
Olga Ouano, President and General Manager of MAERC, upon the instruction of SMC
through its supervisors to make it appear that complainants were hired by MAERC. This
was testified to by two (2) of the workers who were segregator and forklift operator
assigned to the Beer Marketing Division at the SMC compound and who had been
working with SMC under a purported contractor Jopard Services since March 1979 and
March 1981, respectively. Both witnesses also testified that together with other
complainants they continued working for SMC without break from Jopard Services to
MAERC.
As for the payment of workers' wages, it is conceded that MAERC was paid in lump
sum but records suggest that the remuneration was not computed merely according to
the result or the volume of work performed. The memoranda of the labor rates bearing
the signature of a Vice-President and General Manager for the Vismin Beer
Operations12 as well as a director of SMC13 appended to the contract of service reveal
that SMC assumed the responsibility of paying for the mandated overtime, holiday and
rest day pays of the MAERC workers.14 SMC also paid the employer's share of the SSS
and Medicare contributions, the 13th month pay, incentive leave pay and maternity
benefits.15 In the lump sum received, MAERC earned a marginal amount representing

the contractor's share. These lend credence to the complaining workers' assertion that
while MAERC paid the wages of the complainants, it merely acted as an agent of SMC.
Petitioner insists that the most significant determinant of an employer-employee
relationship, i.e., the right to control, is absent. The contract of services between
MAERC and SMC provided that MAERC was an independent contractor and that the
workers hired by it "shall not, in any manner and under any circumstances, be
considered employees of the Company, and that the Company has no control or
supervision whatsoever over the conduct of the Contractor or any of its workers in
respect to how they accomplish their work or perform the Contractor's obligations under
the Contract."16
In deciding the question of control, the language of the contract is not determinative of
the parties' relationship; rather, it is the totality of the facts and surrounding
circumstances of each case.17
Despite SMCs disclaimer, there are indicia that it actively supervised the complainants.
SMC maintained a constant presence in the workplace through its own checkers. Its
asseveration that the checkers were there only to check the end result was belied by
the testimony of Carlito R. Singson, head of the Mandaue Container Service of SMC,
that the checkers were also tasked to report on the identity of the workers whose
performance or quality of work was not according to the rules and standards set by
SMC. According to Singson, "it (was) necessary to identify the names of those
concerned so that the management [referring to MAERC] could call the attention to
make these people improve the quality of work." 18
Viewed alongside the findings of the Labor Arbiter that the MAERC organizational setup in the bottle segregation project was such that the segregators/cleaners were
supervised by checkers and each checker was also under a supervisor who was in turn
under a field supervisor, the responsibility of watching over the MAERC workers by
MAERC personnel became superfluous with the presence of additional checkers from
SMC.
Reinforcing the belief that the SMC exerted control over the work performed by the
segregators or cleaners, albeit through the instrumentality of MAERC, were letters by
SMC to the MAERC management. These were letters 19 written by a certain Mr. W.
Padin20 addressed to the President and General Manager of MAERC as well as to its
head of operations,21 and a third letter22 from Carlito R. Singson also addressed to the
President and General Manager of MAERC. More than just a mere written report of the
number of bottles improperly cleaned and/or segregated, the letters named three (3)
workers who were responsible for the rejection of several bottles, specified the infraction
committed in the segregation and cleaning, then recommended the penalty to be
imposed. Evidently, these workers were reported by the SMC checkers to the SMC
inspector.

While the Labor Arbiter dismissed these letters as merely indicative of the concern in
the end-result of the job contracted by MAERC, we find more credible the contention of
the complainants that these were manifestations of the right of petitioner to recommend
disciplinary measures over MAERC employees. Although calling the attention of its
contractors as to the quality of their services may reasonably be done by SMC, there
appears to be no need to instruct MAERC as to what disciplinary measures should be
imposed on the specific workers who were responsible for rejections of bottles. This
conduct by SMC representatives went beyond a mere reminder with respect to the
improperly cleaned/segregated bottles or a genuine concern in the outcome of the job
contracted by MAERC.
Control of the premises in which the contractor's work was performed was also viewed
as another phase of control over the work, and this strongly tended to disprove the
independence of the contractor. 23 In the case at bar, the bulk of the MAERC
segregation activities was accomplished at the MAERC-owned PHILPHOS warehouse
but the building along with the machinery and equipment in the facility was actually
being rented by SMC. This is evident from the memoranda of labor rates which included
rates for the use of forklifts and the warehouse at the PHILPHOS area, hence, the
NLRC's conclusion that the payment for the rent was cleverly disguised since MAERC
was not in the business of renting warehouses and forklifts. 24
Other instances attesting to SMC's supervision of the workers are found in the minutes
of the meeting held by the SMC officers on 5 December 1988. Among those matters
discussed were the calling of SMC contractors to have workers assigned to segregation
to undergo and pass eye examination to be done by SMC EENT company doctor and a
review of compensation/incentive system for segregators to improve the segregation
activities.25
But the most telling evidence is a letter by Mr. Antonio Ouano, Vice-President of
MAERC dated 27 May 1991 addressed to Francisco Eizmendi, SMC President and
Chief Executive Officer, asking the latter to reconsider the phasing out of SMC's
segregation activities in Mandaue City. The letter was not denied but in fact used by
SMC to advance its own arguments.26
Briefly, the letter exposed the actual state of affairs under which MAERC was formed
and engaged to handle the segregation project of SMC. It provided an account of how in
1987 Eizmendi approached the would-be incorporators of MAERC and offered them the
business of servicing the SMC bottle-washing and segregation department in order to
avert an impending labor strike. After initial reservations, MAERC incorporators
accepted the offer and before long trial segregation was conducted by SMC at the
PHILPHOS warehouse.27
The letter also set out the circumstances under which MAERC entered into the Contract
of Services in 1988 with the assurances of the SMC President and CEO that the
employment of MAERC's services would be long term to enable it to recover its
investments. It was with this understanding that MAERC undertook borrowings from

banking institutions and from affiliate corporations so that it could comply with the
demands of SMC to invest in machinery and facilities.
In sum, the letter attested to an arrangement entered into by the two (2) parties which
was not reflected in the Contract of Services. A peculiar relationship mutually beneficial
for a time but nonetheless ended in dispute when SMC decided to prematurely end the
contract leaving MAERC to shoulder all the obligations to the workers.
Petitioner also ascribes as error the failure of the Court of Appeals to apply the ruling in
Neri v. NLRC.28 In that case, it was held that the law did not require one to possess both
substantial capital and investment in the form of tools, equipment, machinery, work
premises, among others, to be considered a job contractor. The second condition to
establish permissible job contracting29 was sufficiently met if one possessed either
attribute.
Accordingly, petitioner alleged that the appellate court and the NLRC erred when they
declared MAERC a labor-only contractor despite the finding that MAERC had
investments amounting to P4,608,080.00 consisting of buildings, machinery and
equipment.
However, in Vinoya v. NLRC,30 we clarified that it was not enough to show substantial
capitalization or investment in the form of tools, equipment, machinery and work
premises, etc., to be considered an independent contractor. In fact, jurisprudential
holdings were to the effect that in determining the existence of an independent
contractor relationship, several factors may be considered, such as, but not necessarily
confined to, whether the contractor was carrying on an independent business; the
nature and extent of the work; the skill required; the term and duration of the
relationship; the right to assign the performance of specified pieces of work; the control
and supervision of the workers; the power of the employer with respect to the hiring,
firing and payment of the workers of the contractor; the control of the premises; the duty
to supply premises, tools, appliances, materials and labor; and the mode, manner and
terms of payment.31
In Neri, the Court considered not only the fact that respondent Building Care
Corporation (BBC) had substantial capitalization but noted that BCC carried on an
independent business and performed its contract according to its own manner and
method, free from the control and supervision of its principal in all matters except as to
the results thereof.32 The Court likewise mentioned that the employees of BCC were
engaged to perform specific special services for their principal. 33 The status of BCC had
also been passed upon by the Court in a previous case where it was found to be a
qualified job contractor because it was "a big firm which services among others, a
university, an international bank, a big local bank, a hospital center, government
agencies, etc." Furthermore, there were only two (2) complainants in that case who
were not only selected and hired by the contractor before being assigned to work in the
Cagayan de Oro branch of FEBTC but the Court also found that the contractor
maintained effective supervision and control over them.

In comparison, MAERC, as earlier discussed, displayed the characteristics of a laboronly contractor. Moreover, while MAERC's investments in the form of buildings, tools
and equipment amounted to more than P4 Million, we cannot disregard the fact that it
was the SMC which required MAERC to undertake such investments under the
understanding that the business relationship between petitioner and MAERC would be
on a long term basis. Nor do we believe MAERC to have an independent business. Not
only was it set up to specifically meet the pressing needs of SMC which was then
having labor problems in its segregation division, none of its workers was also ever
assigned to any other establishment, thus convincing us that it was created solely to
service the needs of SMC. Naturally, with the severance of relationship between
MAERC and SMC followed MAERC's cessation of operations, the loss of jobs for the
whole MAERC workforce and the resulting actions instituted by the workers.
Petitioner also alleged that the Court of Appeals erred in ruling that "whether MAERC is
an independent contractor or a labor-only contractor, SMC is liable with MAERC for the
latter's unpaid obligations to MAERC's workers."
On this point, we agree with petitioner as distinctions must be made. In legitimate job
contracting, the law creates an employer-employee relationship for a limited purpose,
i.e., to ensure that the employees are paid their wages. 34 The principal employer
becomes jointly and severally liable with the job contractor only for the payment of the
employees' wages whenever the contractor fails to pay the same. Other than that, the
principal employer is not responsible for any claim made by the employees.
On the other hand, in labor-only contracting, the statute creates an employer-employee
relationship for a comprehensive purpose: to prevent a circumvention of labor laws. The
contractor is considered merely an agent of the principal employer and the latter is
responsible to the employees of the labor-only contractor as if such employees had
been directly employed by the principal employer. The principal employer therefore
becomes solidarily liable with the labor-only contractor for all the rightful claims of the
employees.
This distinction between job contractor and labor-only contractor, however, will not
discharge SMC from paying the separation benefits of the workers, inasmuch as
MAERC was shown to be a labor-only contractor; in which case, petitioner's liability is
that of a direct employer and thus solidarily liable with MAERC.
SMC also failed to comply with the requirement of written notice to both the employees
concerned and the Department of Labor and Employment (DOLE) which must be given
at least one (1) month before the intended date of retrenchment. 35 The fines imposed for
violations of the notice requirement have varied. 36 The measure of this award depends
on the facts of each case and the gravity of the omission committed by the employer.37
For its failure, petitioner was justly ordered to indemnify each displaced worker
P2,000.00.

The NLRC and the Court of Appeals affirmed the Labor Arbiter's award of separation
pay to the complainants in the total amount of P2,334,150.00 and of wage differentials
in the total amount of P845,117.00. These amounts are the aggregate of the awards
due the two hundred ninety-one (291) complainants as computed by the Labor Arbiter.
The following is a summary of the computation of the benefits due the complainants
which is part of the Decision of the Labor Arbiter.
SUMMARY
NAME
SALARY
SEPARATION
DIFFERENTIAL
PAY

TOTAL

Case No. 06-1165-9


1 Rogelio Prado, Jr.

P3,056.00

P8,190.00

P11,246.00

2 Eddie Selle

3,056.00

8,190.00

11,246.00

3 Alejandro
Annabieza

3,056.00

8,190.00

11,246.00

4 Ananias Jumao-as

3,056.00

8,190.00

11,246.00

5 Consorcio
Manloloyo

3,056.00

8,190.00

11,246.00

6 Anananias Alcotin

3,056.00

8,190.00

11,246.00

7 Rey Gestopa

2,865.00

8,190.00

11,055.00

8 Edgardo Nuez

2,865.00

8,190.00

11,055.00

9 Junel Cabatingan

2,865.00

8,190.00

11,055.00

10 Paul Dumaqueta

2,865.00

8,190.00

11,055.00

11 Felimon Echavez

2,843.00

8,190.00

10,673.00

12 Vito Sealana

2,843.00

8,190.00

10,673.00

13 Denecia Palao

2,843.00

8,190.00

10,673.00

14 Roberto Lapiz

3,056.00

8,190.00

11,246.00

15 Baltazar Labio

3,056.00

8,190.00

11,246.00

16 Leonardo Bongo

3,056.00

8,190.00

11,246.00

17 El Cid Icalina

3,056.00

8,190.00

11,246.00

18 Jose Diocampo

3,056.00

8,190.00

11,246.00

19 Adelo Cantillas

3,056.00

8,190.00

11,246.00

20 Isaias Branzuela

3,056.00

8,190.00

11,246.00

21 Ramon Rosales

3,056.00

8,190.00

11,246.00

22 Gaudencio Peson

3,056.00

8,190.00

11,246.00

23 Hector Cabaog

3,056.00

8,190.00

11,246.00

24 Edgardo Dagmayan

3,056.00

8,190.00

11,246.00

25 Rogelio Cruz

3,056.00

8,190.00

11,246.00

26 Rolando Espina

3,056.00

8,190.00

11,246.00

27 Bernardino Regidor

3,056.00

8,190.00

11,246.00

28 Arnelio Sumalinog

3,056.00

8,190.00

11,246.00

29 Gumersindo
Alcontin

3,056.00

8,190.00

11,246.00

30 Loreto Nuez

3,056.00

8,190.00

11,246.00

31 Joebe Boy Dayon

3,056.00

8,190.00

11,246.00

32 Conrado Mesanque

3,056.00

8,190.00

11,246.00

33 Marcelo Pescador

3,056.00

8,190.00

11,246.00

34 Marcelino Jabagat

3,056.00

8,190.00

11,246.00

35 Vicente Devilleres

3,056.00

8,190.00

11,246.00

36 Vicente Alin

3,056.00

8,190.00

11,246.00

37 Rodolfo Pahugot

3,056.00

8,190.00

11,246.00

38 Ruel Navares

3,056.00

8,190.00

11,246.00

39 Danilo Anabieza

3,056.00

8,190.00

11,246.00

40 Alex Juen

3,056.00

8,190.00

11,246.00

41 Juanito Garces

3,056.00

8,190.00

11,246.00

42 Silvino Limbaga

3,056.00

8,190.00

11,246.00

43 Aurelio Jurpacio

3,056.00

8,190.00

11,246.00

44 Jovito Loon

3,056.00

8,190.00

11,246.00

45 Victor Tenedero

3,056.00

8,190.00

11,246.00

46 Sasing Moreno

3,056.00

8,190.00

11,246.00

47 Wilfredo Hortezuela

3,056.00

8,190.00

11,246.00

48 Joselito Melendez

3,056.00

8,190.00

11,246.00

49 Alfredo Gestopa

3,056.00

8,190.00

11,246.00

50 Regino Gabuya

3,056.00

8,190.00

11,246.00

51 Jorge Gamuzarno

3,056.00

8,190.00

11,246.00

52 Lolito Cocido

3,056.00

8,190.00

11,246.00

53 Efraim Yubal

3,056.00

8,190.00

11,246.00

54 Venerando Roamar

3,056.00

8,190.00

11,246.00

55 Gerardo Butalid

3,056.00

8,190.00

11,246.00

56 Hipolito Vidas

3,056.00

8,190.00

11,246.00

57 Vengelito Frias

3,056.00

8,190.00

11,246.00

58 Vicente Celacio

3,056.00

8,190.00

11,246.00

59 Corlito Pestaas

3,056.00

8,190.00

11,246.00

60 Ervin Hyrosa

3,056.00

8,190.00

11,246.00

61 Rommel Guerero

3,056.00

8,190.00

11,246.00

62 Rodrigo Enerlas

3,056.00

8,190.00

11,246.00

63 Francisco
Carbonilla

3,056.00

8,190.00

11,246.00

64 Nicanor Cuizon

3,056.00

8,190.00

11,246.00

65 Pedro Briones

3,056.00

8,190.00

11,246.00

66 Rodolfo Cabalhug

3,056.00

8,190.00

11,246.00

67 Teofilo Ricardo

3,056.00

8,190.00

11,246.00

68 Danilo R. Dizon

3,056.00

8,190.00

11,246.00

69 Alberto Embong

3,056.00

8,190.00

11,246.00

70 Alfonso Echavez

3,056.00

8,190.00

11,246.00

71 Gonzalo Roracea

3,056.00

8,190.00

11,246.00

72 Marcelo Caracina

3,056.00

8,190.00

11,246.00

73 Raul Borres

3,056.00

8,190.00

11,246.00

74 Lino Tongalamos

3,056.00

8,190.00

11,246.00

75 Artemio Bongo, Jr.

3,056.00

8,190.00

11,246.00

76 Roy Avila

3,056.00

8,190.00

11,246.00

77 Melchor Freglo

3,056.00

8,190.00

11,246.00

78 Raul Cabillada

3,056.00

8,190.00

11,246.00

79 Eddie Catab

3,056.00

8,190.00

11,246.00

80 Melencio Durano

3,056.00

8,190.00

11,246.00

81 Allan Rago

3,056.00

8,190.00

11,246.00

82 Dominador
Caparida

3,056.00

8,190.00

11,246.00

83 Jovito Catab

3,056.00

8,190.00

11,246.00

84 Albert Laspias

3,056.00

8,190.00

11,246.00

85 Alex Anabieza

3,056.00

8,190.00

11,246.00

86 Nestor Reynante

3,056.00

8,190.00

11,246.00

87 Eulogio Estopa

3,056.00

8,190.00

11,246.00

88 Mario Bolo

3,056.00

8,190.00

11,246.00

89 Ederlito A.
Balocano

3,056.00

8,190.00

11,246.00

90 Joel Pepito

3,056.00

8,190.00

11,246.00

91 Reynaldo Ludia

3,056.00

5,460.00

8,516.00

92 Manuel Cinco

3,056.00

5,460.00

8,516.00

93 Allan Agustin

3,056.00

8,190.00

11,246.00

94 Pablito Polegrates

3,056.00

8,190.00

11,246.00

95 Clyde Prado

3,056.00

8,190.00

11,246.00

96 Dindo Misa

3,056.00

8,190.00

11,246.00

97 Roger Sasing

3,056.00

8,190.00

11,246.00

98 Ramon Arcallana

3,056.00

8,190.00

11,246.00

99 Gabriel Salas

3,056.00

8,190.00

11,246.00

100 Edwin Sasan

3,056.00

8,190.00

11,246.00

101 Diosdado Barriga

3,056.00

8,190.00

11,246.00

102 Moises Sasan

3,056.00

8,190.00

11,246.00

103 Sinforiano Cantago

3,056.00

8,190.00

11,246.00

104 Leonardo
Marturillas

3,056.00

8,190.00

11,246.00

105 Mario Ranis

3,056.00

8,190.00

11,246.00

106 Alejandro Ranido

3,056.00

8,190.00

11,246.00

107 Jerome Prado

3,056.00

8,190.00

11,246.00

108 Raul Oyao

3,056.00

8,190.00

11,246.00

109 Victor Celacio

3,056.00

5,460.00

8,516.00

TOTAL
P330,621.00

P884,520.00 P1,215,141.00

Case No. 07-1177-91


110 Gerardo Roque

P3,056.00

P5,460.00

P8,516.00

P3,056.00

P8,192.00

P11,246.00

P3,056.00

P5,460.00

P8,516.00

113 Jose Zanoria

3,056.00

5,460.00

8,516.00

114 Allan Zanoria

3,056.00

5,460.00

8,516.00

115 Victorino Seno

3,056.00

5,460.00

8,516.00

116 Teodulo Jumao-as

3,056.00

5,460.00

8,516.00

117 Alexander Hera

3,056.00

5,460.00

8,516.00

118 Anthony Araneta

3,056.00

5,460.00

8,516.00

Case No. 07-1176-91


111 Zosimo Cararaton
Case No. 07-1219-91
112 Virgilio Zanoria

119 Aldrin Suson

3,056.00

5,460.00

8,516.00

120 Victor Verano

3,056.00

5,460.00

8,516.00

121 Ruel Sufrerencia

3,056.00

5,460.00

8,516.00

122 Alfred Naparate

3,056.00

5,460.00

8,516.00

123 Wenceslao
Baclohon

3,056.00

8,190.00

11,246.00

124 Eduardo Langita

3,056.00

8,190.00

11,246.00

P39,728.00

P76,440.00

P116,168.00

125 Feliz Ordeneza

P2,816.00

P8,190.00

P11,006.00

126 Arsenio Logarta

3,056.00

8,190.00

11,246.00

127 Eduardo dela Vega

3,056.00

8,190.00

11,246.00

128 Joventino Canoog

3,056.00

8,190.00

11,246.00

P11,984.00

P32,760.00

P44,744.00

P3,056.00

P8,190.00

P11,246.00

TOTAL

Case No. 07-1283-91

TOTAL

Case No. 10-1584-91


129 Regelio Abapo
Case No. 08-1321-91

130 Ricardo Ramas

P3,056.00

P8,190.00

P11,246.00

P2,816.00

P8,190.00

P11,006.00

132 Antonio Basalan

2,816.00

8,190.00

11,006.00

133 Lyndon Basalan

2,816.00

8,190.00

11,006.00

134 Wilfredo Aliviano

2,816.00

8,190.00

11,006.00

135 Bienvenido Rosario

2,816.00

8,190.00

11,006.00

136 Jesus
Capangpangan

2,816.00

8,190.00

11,006.00

137 Renato Mendoza

2,816.00

8,190.00

11,006.00

138 Alejandro
Catandejan

2,816.00

8,190.00

11,006.00

139 Ruben Talaba

2,816.00

8,190.00

11,006.00

140 Filemon Echavez

2,816.00

8,190.00

11,006.00

141 Marcelino
Caracena

2,816.00

8,190.00

11,006.00

142 Ignacio Misa

2,816.00

8,190.00

11,006.00

Case No. 09-1507-91


131 Jose Bandialan

143 Feliciano Agbay

2,816.00

8,190.00

11,006.00

144 Victor Maglasang

2,816.00

8,190.00

11,006.00

145 Arturo Heyrosa

2,816.00

8,190.00

11,006.00

146 Alipio Tirol

2,816.00

8,190.00

11,006.00

147 Rosendo Mondares

2,816.00

8,190.00

11,006.00

148 Aniceto Ludia

2,816.00

8,190.00

11,006.00

149 Reynaldo
Lavandero

2,816.00

8,190.00

11,006.00

150 Reuyan Herculano

2,816.00

8,190.00

11,006.00

151 Teodula Nique

2,816.00

8,190.00

11,006.00

P59,136.00

P171,990.00

P231,126.00

P2,816.00

P8,190.00

P11,006.00

153 Zosimo Baobao

2,816.00

8,190.00

11,006.00

154 Medardo Singson

2,816.00

8,190.00

11,006.00

155 Antonio

2,816.00

8,190.00

11,006.00

TOTAL

Case No. 06-1145-91


152 Emerberto Orque

Patalinghug

156 Ernesto Singson

2,816.00

8,190.00

11,006.00

157 Roberto Torres

2,816.00

8,190.00

11,006.00

158 Cesar Escario

2,816.00

8,190.00

11,006.00

159 Leodegario Dollecin

2,816.00

8,190.00

11,006.00

160 Alberto Anoba

2,816.00

8,190.00

11,006.00

161 Rodrigo Bisnar

2,816.00

8,190.00

11,006.00

162 Zosimo Bingas

2,816.00

8,190.00

11,006.00

163 Rosalio Duran, Sr.

2,816.00

8,190.00

11,006.00

164 Rosalio Duran, Jr.

2,816.00

8,190.00

11,006.00

165 Romeo Duran

2,816.00

8,190.00

11,006.00

166 Antonio Abella

2,816.00

8,190.00

11,006.00

167 Mariano Repollo

2,816.00

8,190.00

11,006.00

168 Polegarpo Degamo

2,816.00

8,190.00

11,006.00

169 Mario Cereza

2,816.00

8,190.00

11,006.00

170 Antonio Laoronilla

2,816.00

8,190.00

11,006.00

171 Proctuso
Magallanes

2,816.00

8,190.00

11,006.00

172 Eladio Torres

2,816.00

8,190.00

11,006.00

173 Warlito Demana

2,816.00

8,190.00

11,006.00

174 Henry Gedaro

2,816.00

8,190.00

11,006.00

175 Doisederio
Gemperao

2,816.00

8,190.00

11,006.00

176 Aniceto Gemperao

2,816.00

8,190.00

11,006.00

177 Jerry Caparoso

2,816.00

8,190.00

11,006.00

178 Serlito Noynay

2,816.00

8,190.00

11,006.00

179 Luciano
Recopelacion

2,816.00

8,190.00

11,006.00

180 Juanito Garces

2,816.00

8,190.00

11,006.00

181 Feliciano Torres

2,816.00

8,190.00

11,006.00

182 Ranilo Villareal

2,816.00

8,190.00

11,006.00

183 Fermin Aliviano

2,816.00

8,190.00

11,006.00

184 Junjie Laviste

2,816.00

8,190.00

11,006.00

185 Tomacito de Castro

2,816.00

8,190.00

11,006.00

186 Joselito Capilina

2,816.00

8,190.00

11,006.00

187 Samuel Casquejo

2,816.00

8,190.00

11,006.00

188 Leonardo Natad

2,816.00

8,190.00

11,006.00

189 Benjamin Sayson

2,816.00

8,190.00

11,006.00

190 Pedro Inoc

2,816.00

8,190.00

11,006.00

191 Edward Flores

2,816.00

8,190.00

11,006.00

192 Edwin Sasan

2,816.00

8,190.00

11,006.00

193 Jose Rey Inot

2,816.00

8,190.00

11,006.00

194 Edgar Cortes

2,816.00

8,190.00

11,006.00

195 Romeo Lombog

2,816.00

8,190.00

11,006.00

196 Nicolas Ribo

2,816.00

8,190.00

11,006.00

197 Jaime Rubin

2,816.00

8,190.00

11,006.00

198 Orlando Regis

2,816.00

8,190.00

11,006.00

199 Ricky Alconza

2,816.00

8,190.00

11,006.00

200 Rudy Tagalog

2,816.00

8,190.00

11,006.00

201 Victorino Tagalog

2,816.00

8,190.00

11,006.00

202 Edward Colina

2,816.00

8,190.00

11,006.00

203 Ronie Gonzaga

2,816.00

8,190.00

11,006.00

204 Paul Cabillada

2,816.00

8,190.00

11,006.00

205 Wilfredo Magalona

2,816.00

8,190.00

11,006.00

206 Joel Pepito

2,816.00

8,190.00

11,006.00

207 Prospero
Maglasang

2,816.00

8,190.00

11,006.00

208 Allan Agustin

2,816.00

8,190.00

11,006.00

209 Fausto Bargayo

2,816.00

8,190.00

11,006.00

210 Nomer Sanchez

2,816.00

8,190.00

11,006.00

211 Jolito Alin

2,816.00

8,190.00

11,006.00

212 Birning Regidor

2,816.00

8,190.00

11,006.00

213 Garry Dignos

2,816.00

8,190.00

11,006.00

214 Edwin Dignos

2,816.00

8,190.00

11,006.00

215 Dario Dignos

2,816.00

8,190.00

11,006.00

216 Rogelio Dignos

2,816.00

8,190.00

11,006.00

217 Jimmy Cabigas

2,816.00

8,190.00

11,006.00

218 Fernando Anajao

2,816.00

8,190.00

11,006.00

219 Alex Flores

2,816.00

8,190.00

11,006.00

220 Fernando Remedio

2,816.00

8,190.00

11,006.00

221 Toto Mosquido

2,816.00

8,190.00

11,006.00

222 Alberto Yagonia

2,816.00

8,190.00

11,006.00

223 Victor Bariquit

2,816.00

8,190.00

11,006.00

224 Ignacio Misa

2,816.00

8,190.00

11,006.00

225 Eliseo Villareno

2,816.00

8,190.00

11,006.00

226 Manuel Lavandero

2,816.00

8,190.00

11,006.00

227 Vircede

2,816.00

8,190.00

11,006.00

228 Mario Ranis

2,816.00

8,190.00

11,006.00

229 Jaime Responso

2,816.00

8,190.00

11,006.00

230 Marianito Aguirre

2,816.00

8,190.00

11,006.00

231 Marcial Heruela

2,816.00

8,190.00

11,006.00

232 Godofredo Tuacao

2,816.00

8,190.00

11,006.00

233 Perfecto Regis

2,816.00

8,190.00

11,006.00

234 Roel Demana

2,816.00

8,190.00

11,006.00

235 Elmer Castillo

2,816.00

8,190.00

11,006.00

236 Wilfredo
Calamohoy

2,816.00

8,190.00

11,006.00

237 Rudy Lucernas

2,816.00

8,190.00

11,006.00

238 Antonio Caete

2,816.00

8,190.00

11,006.00

239 Efraim Yubal

2,816.00

8,190.00

11,006.00

240 Jesus
Capangpangan

2,816.00

8,190.00

11,006.00

241 Damian
Capangpangan

2,816.00

8,190.00

11,006.00

242 Teofilo
Capangpangan

2,816.00

8,190.00

11,006.00

243 Nilo Capangpangan

2,816.00

8,190.00

11,006.00

244 Cororeno
Capangpangan

2,816.00

8,190.00

11,006.00

245 Emilio Mondares

2,816.00

8,190.00

11,006.00

246 Ponciano Agana

2,816.00

8,190.00

11,006.00

247 Vicente Devilleres

2,816.00

8,190.00

11,006.00

248 Mario Alipan

2,816.00

8,190.00

11,006.00

249 Romanito Alipan

2,816.00

8,190.00

11,006.00

250 Aldeon Robinson

2,816.00

8,190.00

11,006.00

251 Fortunato Soco

2,816.00

8,190.00

11,006.00

252 Celso Compuesto

2,816.00

8,190.00

11,006.00

253 William Itoralde

2,816.00

8,190.00

11,006.00

254 Antonio Pescador

2,816.00

8,190.00

11,006.00

255 Jeremias Rondero

2,816.00

8,190.00

11,006.00

256 Estropio Punay

2,816.00

8,190.00

11,006.00

257 Leovijildo Punay

2,816.00

8,190.00

11,006.00

258 Romeo
Quilongquilong

2,816.00

8,190.00

11,006.00

259 Wilfredo Gestopa

2,816.00

8,190.00

11,006.00

260 Eliseo Santos

2,816.00

8,190.00

11,006.00

261 Henry Orio

2,816.00

8,190.00

11,006.00

262 Jose Yap

2,816.00

8,190.00

11,006.00

263 Nicanor Manayaga

2,816.00

8,190.00

11,006.00

264 Teodoro Salinas

2,816.00

8,190.00

11,006.00

265 Aniceto Montero

2,816.00

8,190.00

11,006.00

266 Rafaelito Versoza

2,816.00

8,190.00

11,006.00

267 Alejandro Ranido

2,816.00

8,190.00

11,006.00

268 Henry Talaba

2,816.00

8,190.00

11,006.00

269 Romulo Talaba

2,816.00

8,190.00

11,006.00

270 Diosdado Besabela

2,816.00

8,190.00

11,006.00

271 Sylvestre Toring

2,816.00

8,190.00

11,006.00

272 Edilberto Padilla

2,816.00

8,190.00

11,006.00

273 Allan Herosa

2,816.00

8,190.00

11,006.00

274 Ernesto Sumalinog

2,816.00

8,190.00

11,006.00

275 Ariston Velasco, Jr.

2,816.00

8,190.00

11,006.00

276 Fernando Lopez

2,816.00

8,190.00

11,006.00

277 Alfonso Echavez

2,816.00

8,190.00

11,006.00

278 Nicanor Cuizon

2,816.00

8,190.00

11,006.00

279 Dominador
Caparida

2,816.00

8,190.00

11,006.00

280 Zosimo Cororation

2,816.00

8,190.00

11,006.00

281 Artemio Loveranes

2,816.00

8,190.00

11,006.00

282 Dionisio Yagonia

2,816.00

8,190.00

11,006.00

283 Victor Celocia

2,816.00

8,190.00

11,006.00

284 Hipolito Vidas

2,816.00

8,190.00

11,006.00

285 Teodoro Arcillas

2,816.00

8,190.00

11,006.00

286 Marcelino Habagat

2,816.00

8,190.00

11,006.00

287 Gaudioso Labasan

2,816.00

8,190.00

11,006.00

288 Leopoldo Regis

2,816.00

8,190.00

11,006.00

289 Aquillo Damole

2,816.00

8,190.00

11,006.00

290 Willy Roble

2,816.00

8,190.00

11,006.00

TOTAL
P391,424.00 P1,138,410.00 P1,529,834.00

RECAP

CASE NO.
SALARY
SEPARATION
DIFFERENTIAL
PAY

TOTAL

06-1165-91

P330,621.00

07-1177-91

3,056.00

5,460.00

8,516.00

06-1176-91

3,056.00

8,190.00

11,246.00

07-1219-91

39,728.00

76,440.00

116,168.00

07-1283-91

11,984.00

32,760.00

44,744.00

10-1584-91

3,056.00

8,190.00

11,246.00

08-1321-91

3,056.00

8,190.00

11,246.00

09-1507-91

59,136.00

171,990.00

231,126.00

391,424.00 1,138,410.00

1,529,834.00

06-1145-91

P884,520.00 P1,215,141.00

GRAND TOTAL
P845,117.00 P2,334,150.00 P3,179,267.00
However, certain matters have cropped up which require a review of the awards to
some complainants and a recomputation by the Labor Arbiter of the total amounts.
A scrutiny of the enumeration of all the complainants shows that some names 38 appear
twice by virtue of their being included in two (2) of the nine (9) consolidated cases. A
check of the Labor Arbiter's computation discloses that most of these names were
awarded different amounts of separation pay or wage differential in each separate case
where they were impleaded as parties because the allegations of the length and period
of their employment for the separate cases, though overlapping, were also different. The

records before us are incomplete and do not aid in verifying whether these names
belong to the same persons but at least three (3) of those names were found to have
identical signatures in the complaint forms they filed in the separate cases. It is likely
therefore that the Labor Arbiter erroneously granted some complainants separation
benefits and wage differentials twice. Apart from this, we also discovered some names
that are almost identical.39 It is possible that the minor variance in the spelling of some
names may have been a typographical error and refer to the same persons although the
records seem to be inconclusive.
Furthermore, one of the original complainants 40 was inadvertently omitted by the Labor
Arbiter from his computations.41 The counsel for the complainants promptly filed a
motion for inclusion/correction42 which motion was treated as an appeal of the Decision
as the Labor Arbiter was prohibited by the rules of the NLRC from entertaining any
motion at that stage of the proceedings. 43 The NLRC for its part acknowledged the
omission44 but both the Commission and subsequently the Court of Appeals failed to
rectify the oversight in their decisions.
Finally, the NLRC ordered both MAERC and SMC to pay P84,511.70 in attorneys fees
which is ten percent (10%) of the salary differentials awarded to the complainants in
accordance with Art. 111 of the Labor Code. The Court of Appeals also affirmed the
award. Consequently, with the recomputation of the salary differentials, the award of
attorney's fees must also be modified.
WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals
dated 28 April 2000 and the Resolution dated 26 July 2000 are AFFIRMED with
MODIFICATION. Respondent Maerc Integrated Services, Inc. is declared to be a laboronly contractor. Accordingly, both petitioner San Miguel Corporation and respondent
Maerc Integrated Services, Inc., are ordered to jointly and severally pay complainants
(private respondents herein) separation benefits and wage differentials as may be finally
recomputed by the Labor Arbiter as herein directed, plus attorney's fees to be computed
on the basis of ten percent (10%) of the amounts which complainants may recover
pursuant to Art. 111 of the Labor Code, as well as an indemnity fee of P2,000.00 to each
complainant.
The Labor Arbiter is directed to review and recompute the award of separation pays and
wage differentials due complainants whose names appear twice or are notably similar,
compute the monetary award due to complainant Niel Zanoria whose name was omitted
in the Labor Arbiter's Decision and immediately execute the monetary awards as found
in the Labor Arbiter's computations insofar as those complainants whose entitlement to
separation pay and wage differentials and the amounts thereof are no longer in
question. Costs against petitioner.
SO ORDERED.